Empire powers ahead with NT gas play

Sydney-based Australian oil and gas company Empire Energy Group has closed the book on a busy December quarter it has hailed as the most active in the firm's history. The workstream was headlined by its drilling completion of the Carpentaria-3H gas well in the Northern Territory’s world-renowned Beetaloo sub-basin and included a record breaking 2632m horizontal section that was realised on time and significantly under budget.

Importantly, Empire says over 90 per cent of Carpentaria-3H’s horizontal interval penetrated the hydrocarbon-rich Velkerri-B shale formation where strong gas shows were observed. The record-shattering horizontal section notched in Carpentaria-3H’s drilling outshines the length of the company’s previous efforts with its Carpentaria-2H well by 150m.

The company believes the program could also be the most extensive in the history of the Beetaloo basin and the operation’s total outlay of $17.3 million is roughly $3.6 million below its initial projections. Empire has since advanced the well to a program of hydraulic stimulation, or “fracking” and has achieved notable results across each of the bore’s 40 planned stages.

Notably, Empire says 35 of the 40 stages activated in its fracking of Carpentaria-3H were executed within the zone’s Velkerri-B shale target – an area the Northern Territory government believes could house as much as 500 trillion cubic feet of gas.

Fracking is often executed on horizontal, gas-bearing shale wells such as Carpentaria-3H and enables companies to optimise the placement of a well’s fractures in order to maximise gas production rates. The fractures are typically positioned along a bore’s target zone and are essentially a site at which an explorer will look to pierce the ground’s geology and release the zone’s gas resources. The number of stages is contingent on an asset’s depth, with deeper bores – such as the over 2600m Carpentaria-3H – generally accommodating more intervals.

To maximise the volume of hydrocarbons extracted in a gas well companies generally frack a bore by piercing the reservoir with a chemical mixture known as fracking fluid. The formulation is pumped downhole at high pressures and can be derived from a suite of ingredients. According to Empire, it used a host of hydraulic fluids in the fracking of Carpentaria-3H’s 40 stages including, crosslink, slickwater and a hybrid blend of both formulations.

The company previously used slickwater to great effect in its nearby Carpentaria-2H gas well and says the material can deliver economical gas recovery rates along with its reduced inclusions of chemical additives. The company has since initiated flowback activities at the well and says 17 per cent of its fracking fluids have been recuperated. The work is key in moving Empire closer to production.

Empire Energy Managing Director Alex Underwood said: “The Empire team has hit the ground running in early 2023. Our key focus is on moving into pilot production. This involves multiple work streams including Front End Engineering and Design, pipeline transportation and gas sales negotiations, indigenous consents and regulatory approvals. We look forward to updating shareholders further as this critical work proceeds.”

The company also targeted and intersected the Velkerri Formation shales with its Carpentaria-4V well over the December period. In August last year the company declared its assets in the Beetaloo held a 2C contingent resource of 554 billion cubic feet of gas and 3.5 million barrels of liquid and after the quarter’s activities management says it expects material growth.

Empire also filled its coffers to the tune of $7.8 million over the period after getting its hands on a research and development tax offset and claimed another $1.4 million in cash courtesy of the Federal Government’s Beetaloo Cooperative Drilling Program.

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